TORONTO, ONTARIO--(Marketwire - March 30, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Candax Energy Inc. (TSX:CAX) announces its financial results for the year ended December 31, 2011 which results are presented in accordance with IFRS and the reporting currency is Canadian dollars. Candax reports a profit for 2011 of $0.5 million ($nil per common share) compared to a loss of $26.2 million ($0.08 per common share) for 2010. The 2011 profit includes a major adjustment on deferred tax for $7.8 million credit.
Revenues for the year were $14.1 million compared to $0.7 million in 2010. The increase in revenue was due to higher oil production in 2011 compared to 2010. In addition, revenue was further increased by the uneven liftings. Production increased in 2011 to 251 bopd from 2010 of 206 bopd as a result of production improvements on Ezzaouia and a successful re-opening of the Robbana 1 well. As at December 31, 2011, Candax held cash and cash equivalents of $13.6 million.
Candax has a term loan which was fully drawn at US$23 million at fiscal year ended 2011. Also, Candax has a loan with its largest holder of common shares under which $4 million remains available.
Year End Reserves
Candax is also pleased to provide information in respect of the independent engineering report prepared by Ryder Scott Company Petroleum Consultants evaluating all of Candax's producing properties in Tunisia for the year ended 2011 (the "Report"). The Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). Candax's total Proven plus Probable Reserves (2P) of oil increased to 3.5 MMbbls (2010 - 3.2MMbbls). Proved Reserves of oil increased to 1.7 MMbbls (2010 - 1.2MMbbls).
The net present value (NPV) of the future cash flows (escalated price forecast, after tax and discounted at 10%) attributable to the 2P reserves is valued at $108.5 million (compared to $91.4 million in 2010). This 18.7% increase is due to a positive price effect and overall increase of net proved reserve attributable to Candax. In addition, Candax has filed its annual information form for the year-ended December 31, 2011, which includes Candax's reserves data and other oil and gas information for the year ended December 31, 2011 as mandated by NI 51-101. The Contingent Resources have not been updated from those reported in Candax's annual information form for fiscal year ended 2007.
Candax has filed its audited financial statements and accompanying notes, management's discussion and analysis and annual information form for its fiscal year ended 2011 with the Canadian securities regulatory authorities. Copies of such documents may be obtained under the profile of Candax at www.sedar.com.
Benoit Debray, Chairman and CEO of Candax, stated:
"2011 was an important development year for Candax on several fronts. We are very pleased to be able to report a meaningful increase in our oil reserves and our PV10 valuation. As important as these metrics are, we are particularly encouraged also by the potential we see in developing our 3 core operating fields in Tunisia, Robbana, El Bibane and Ezzaouia, but also the untapped potential of our currently non-operating assets.
In looking to further develop our assets, we are pleased with the progress we have made in cleaning up and streamlining of the ownership structure of our assets. As previously announced, Candax purchased the back-in rights of Dana Gas for the deep Triassic potential resource. In late December 2011, Candax signed an agreement to purchase the working interest of PA Resources in our El Bibane and Ezzaouia fields. In addition, as a part of the investment by IFC (the member of the World Bank focused on private sector development), Candax has the ability to purchase the remaining working interest in El Bibane and Robbana, currently owned by Maghreb. Upon all these transactions being completed, the result would be Candax having 100% ownership of El Bibane, 100% ownership of Robbana and 45% ownership of Ezzaouia with only one partner, ETAP, the Tunisian state oil company. It is expected that this reorganization of ownership structure will put Candax in a position of strength with respect to development of the fields in 2012 and beyond.
One of the key developments of 2011 was the announcement of an approximately $9.7 million equity investment by the IFC combined with a $2 million additional investment by management and members of the board of directors. Candax is very pleased to have IFC, a large and sophisticated investor, as part of the ownership structure of the company. In addition, the personal investment by certain members of our management and our directors is a testament to the belief and commitment of our management and board in the company.
2011 delivered improving results on operations but more work is to be done. Our focus in 2012 will be to make it a key transition year by attempting to realize on the significant potential imbedded in the assets of the company."
Candax is an international energy company with its head office in Toronto and offices in Tunis and Madagascar. The Candax group is engaged in exploration and the production of oil and gas in Tunisia and holds an interest in an exploration permit in Madagascar.
This news release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the ability of Candax to continue to service its debt; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Candax to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Candax to fund the capital and operating expenses necessary to achieve the business objectives of Candax, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Candax. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Candax should not place undue reliance on these forward-looking statements.